Passing on a one-man-band company to wife?

Will giving wife one share in company allow easy transfer on death?

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This may be more a question for a lawyer but some of you may have actual experience of this kind of scenario and have some thoughts on the matter. Director/owner has all 2 shares in own company. Physical sssets are office equipment and an electric car. Director's loan account shows he is owed about £40k. There are about £20k of unutilised corporation tax losses of £20k brought foward.He hasn't got long to live. Should he just give one share to his wife and add her to the company bank account to ensure an easy, practical transfer on death?

Replies (12)

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By Bobbo
11th Jun 2024 10:10

You don't explicitly specify it, but can we assume the "director/owner" is the *only* director of the company at present?

I make no comment on the shares, but from previous posts on this forum it seems that it would be a very sensible idea for the company to have a second director.

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By Tax Dragon
11th Jun 2024 10:19

Transfer of what? Is the company going to continue [trading?] but with one woman in its band?

You need to be clearer (in your head) about what you are trying to achieve.

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By Roland195
11th Jun 2024 10:29

What is the financial position of the company? Does the wife necessarily want the statutory responsibility?

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By Paul Crowley
11th Jun 2024 10:59

Make her a director today.
That is the thing that will keep the bank account working.
CGT is not a problem on death. The business will get business property relief for him for IHT
I would wait out on the shares. The value will be uplifted for CGT when passed over on death.

CT
If the car is liable to CT on disposal (100% claimed when bought) then it would be worth looking at what the arithmetic is post death.

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Replying to Paul Crowley:
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By Tax Dragon
11th Jun 2024 11:20

Caveat: If that's cheaper, easier and quicker than simply winding it up now, if it has no future. (You need to trigger the BC while there's still a trade and that may be only while husband is alive. This is one potential issue with automatically claiming full CAs as early as possible in companies.)

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Replying to Tax Dragon:
By ireallyshouldknowthisbut
11th Jun 2024 13:48

@TD, your answer has confused me. Not that that is difficult.

So what happens if a vehicle is sold post trading? So for example if a client has a trade, buys an EV, claims full CA's...........the company does nothing for say 3 years apart from sit the cash on deposit and pay out dividends at BR and run the vehicle, client pay the BIK as appopriate, and then on winding up I thought you would just get a CT bill for the sale of the vehicle. What am I missing? Apart from a tax education natrually!

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Replying to ireallyshouldknowthisbut:
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By Tax Dragon
11th Jun 2024 14:03

Isn't there a BC at cessation? Which, I agree, makes half of my post look a bit silly. I thought that after I'd pressed post, but CBB to change it.

But to answer your question, don't losses die with the trade? No c/fwd post cessation. Haven't we had threads on that very point?

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Replying to Tax Dragon:
By ireallyshouldknowthisbut
11th Jun 2024 14:12

Tax Dragon wrote:

Isn't there a BC at cessation? Which, I agree, makes half of my post look a bit silly. I thought that after I'd pressed post, but CBB to change it.

Well I was asking you, but thanks, yes there would be on cessation of trade (he says having just looked it up). I dont have many clients with assets but I guess with the rise of EV's I might do in the future. The trouble with most small clients is you dont know when trading is or isnt finished as thy end up doing "a bit when it comes up" for some time when in run off. "when the insuance runs out" is usually as good as it gets.

Anyhow, every day is a school day. Thanks.

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Replying to ireallyshouldknowthisbut:
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By Tax Dragon
11th Jun 2024 14:18

Death of the trader might be a clincher.

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Replying to Tax Dragon:
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By FactChecker
11th Jun 2024 15:20

I thought Covid was supposed to have unleashed a herd of zombie businesses on us?

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Replying to Tax Dragon:
By ireallyshouldknowthisbut
11th Jun 2024 16:43

Tax Dragon wrote:

Death of the trader might be a clincher.

You are dead right.

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Replying to Tax Dragon:
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By gillybean04
11th Jun 2024 18:09

Is that preferable to death of a salesman?

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